Brand equity

Definitions 

³Brand equity is the set of brand assets and liabilities linked to the brand, its name, and symbol, that adds or subtracts value to a product or service for a firm/ or its customers´ (David Aaker). ³Brand equity is the set of associations that permits the brand to earn greater volume than it would without the brand name´ (Marketing Science Institute). ³Brand equity is everything the customer walks into the store with´ (Peter Farquhar). ³A set of associations which are most strongly linked to a brand name´ (Andrea Dunham).   

(source: Franzen, 1999)

Overall« Franzen (1999): 4 principle dimensions within brand equity definitions:     Presence of a brand in consumers mind Influence on their buying behaviour Effects on brands market position and financial result Financial value of the brand as a immaterial assets of the company .

1999) Market response Brand Equity Mental Brand Equity Behavioural Brand Equity Financial/Economical Brand Equity Brand behavioural response .The concept of brand equity Mental Brand response (Franzen.

Mental Brand Equity 1. Brand awareness Defining brand meaning Brand positioning Price/ quality assessment Overall evaluation/ attitudes Buying behaviour tendency Brand relationship . 7. 5. 2. 4. 6. 3.

g. 1999)  . Only marginal influence in choice behaviour. of a brand category ³toothpaste´ in consumers¶ mind and behaviour. (Franzen. 1996) Broken down into 3 parts:  First mentioned brand ± as strong brands should be at the front of the memory and come up spontaneously when thinking about a category TOMA (=top of mind awareness)  Spontaneous brand awareness -Expression of total presence of brand e. Brand awareness ³The strength of a brand¶s presence in the consumer¶s mind´ (Aaker. These brands are not part of consideration set. brand recognition from a list. These brand were bought and will be bought in future part of the consideration set Aided brand awareness ± e.g.1.

olfactory.2. stereotypical associations to country or region Company/ maker µendorsement -¶ vs µdriver brands¶ (Aaker. symbolic meaning Situational meanings ± associations and moments of consumption of a particular brand Symbolic meaning ± allocation of human attributes to brands: brand personality (Aaker 1997.visual.g. later on) & brand values Price Quality Presentation & Advertising . 1996) Functional meaning ± functional vs. auditive. Brand meaning          Brand signals . taste and tactile characteristics Origin ± e.

Hallmark. Mercedes. charming. Kodak Porsche.1% Domestic. IBM Competence 17. Benetton Amex. genuine.5% Sophistication 11. efficient Glamorous.9% Lexus. romantic Tough. Absolut. Malboro. 1997) Traits Brand Sincerity Excitement 26. Nike Ruggedness 8. imaginative.Brand personality Brand Personality Scale (BPS) Variance Explained (Aaker. responsible. pretentious. dependable. Revlon Levi¶s.8% . spirited. CNN. honest. outdoorsy. rugged Campbell¶s. strong. cheerful Daring.5% 25. up-to-date Reliable.

Classical categorisation theories: Concepts are organised into hierarchies in long-term memory. Brands are placed in categories and subcategories on the basis of product or product or product variants.g. Vertical dimension represents various levels from general to specific: from category to subcategory to sub-subcategory« Horizontal dimension represents characteristics differences between groups at the same level.3. Hierarchical structures have horizontal and vertical dimensions.   . Brand positioning  Brands and their relation towards competing brands are stored in unique position in consumers brain. GAP is more expensive than H&M) When evaluating and comparing brands consumers classify them in groups or subgroups on the basis of the most common attributes or most characteristic differences (Franzen & Bouwman 2001). (e.

For each category there is a Prototype entity ± the most original and most representative example. In many product fields there are such prototypical brands Kleenex (1924) e. .«  Prototype Approach: This approach is widely accepted in psychology as alternative of a strict hierarchical structure of knowledge in long-term memory. facial tissue: detergent: Persil (1909) Therefore. brands within a category are arranged by the extend to which they are representative for the category in relation to the prototype.g.

1997).g. extensions have their limits.Critique & Exploitations of Brand Positioning A) Extensions and brand elasticity  Launching brand extensions often means to exploit the already existing brand position in the consumers brain. Virgin)  However. often refereed to as brand elasticity (Howard & Matter.  Two key issues in brand elasticity which determine the µ consumers breaking point¶ or trust in an extension were proximity and functionality. . hence the market (e.

From than on all products were tested against these core values.« B) Concept brands vs.g. . a vision. improvements. apparent improvements or added value. a world into the market´ Rijkenberg (1998). ³Concept brands distinguish themselves from classical µproduct brands¶ because they do not claim any intrinsic qualities. sex & rebellion were reintroduced after red figures in 1980s. ³Levi-like´ the roots of Levi¶s brand: denim. rather in terms of their concept. It is assumed that brands are no longer characterised on the basis of its products or product variants to which they are connected to. but bring a body of thoughts. product brands  Lately it is discussed that brands no longer form the basis for brand positioning.  E. jeans.

(Buzzel & Gale 1987) Price assessment  Perception of relative prize affects consumer¶s decisions about including brands in their consideration set or not.4. it is an important variable affecting companies¶ profitability. b) return on investment. packaging  Partly determined by ³meeting users¶ expectations´  Relevance: strong correlation between perceived relative quality and a) return on sales. Quality & Price assessment Perceived quality:  A relative concept that occurs mainly in a competitive setting. . perceived quality of Audi compared to Fiat.g. brand A might be better in one subcategory but not in another.  Category dependent.  Situational variables: physical and social surrounding of usage  Based on quality cues e. Thus.

context. 1996. Millward Brown) For this reason estimates of brand equity and its course could be obtained by segmenting its users according to their relative strength of attitudes towards alternative. hence competitive brands (see Conversion Model by Hofmeyr.5. Van der Pilgt & De Vries 1991) However. goal. 1990) . an important implication was that when measuring attitudes to predict behaviour these must conform the principle of correspondence (action. time) High correlations in many product categories between consideration scores (attitudes) and brand¶s sales (Dyson et al. Brand attitudes/ Overall evaluation     The importance of brand attitudes is based on the predictive power of attitudes on intention and intention on behavior (Fishbein & Ajzen 1975.

habitual. . Once acquired and given a specific stimulus situation automatic. a clear distinction between intentional conscious decision making and automatically performed µacquired tendencies¶. These acquired purchasing habits are fundamental components of brand networks in our memory.6. Thus. Buying behaviour tendency     When considering low involvement products many purchases are rather automated. non-conscious processes will be performed (Bargh. Consequently. research must distinguish between prediction of brand purchasing behaviour by means of attitude & intention and past behaviour in form of acquired tendencies & habits. 1997).

1997):  Practical role ± habit & convenience  Emotional role ± identification & self-expression  Social Role ± communication of who you are . and which is characterised by a strengthening emotional bond´ (Fournier. which has its goals helping to reach the instrumental.7.and/or social±psychological goals of the partners. Purpose for consumer (Langer. Brand Relation  Definition: ³Relationship between a person and a brand as a voluntary or imposed mutual dependency that is characterised by a unique history of interactions and the anticipation of common events in the future. 1994).

whether reasons for brand loyalty prevail over reason for change brand . Segmentation of users within a category according to relative strength of their attitudes towards alternative brands. 2. 1990)    1. 3. Establishes strength of consumer preferences in each brand compared with brand use. Uses 4 types of questions: Assessment ± overall assessment of brand on 7-point scale (µcold¶ ± µhot¶ corresponding emotional distance) Satisfaction of needs ± satisfaction with the brand on 10 ± point scale (µvery dissatisfies¶ ± µperfectly satisfied in every respect¶ Importance ± measures of involvement with product category Movement ± measurement of inclination to change.Conversion Model (Hofmeyer. 4.

starting to consider other brands Available consumers non-users who prefer the brand in question to their current choice Ambivalent consumers non-users equally attracted to the brand in question and current choice Unavailable non-users Weakly unavailable consumers non-users whose preference lies with their current brand. but not strongly Convertible users on the threshold for leaving the brand Vulnerable users Strongly unavailable consumers non-users who have strong preference for their current brand . committed to the brand Shallow users beginning to show sign of wavering.Secure users Open non-users Conversion Model Entrenched users users who are not available for conversion. remain loyal Average users secure users who are not available for conversion. loyalty below average.

Using this model a Market leader brand was described as: Bonded: 26% Advantage: 53% Performance: 57% Relevance: 61% Presence: 88%  .Millward Brown¶s µBrand Dynamics Pyramid¶  Using a consumer brand equity tool µConsumer Value Model¶ in 35 countries.000 brands used to construct a hierarchy of brand equity ± Brand Dynamics Pyramid. 175 product categories and 17.

Differentiation: perceived distinctiveness II.Young & Rubicam¶s Brand Asset Valuator   Procedure: Phone-Interview (brand awareness) + written questionnaire (32 items on current brand use. Appreciation: How popular is the brand? How high is its quality? IV. Knowledge: brand awareness. . I. knowledge of the brands core meanings & feeling of knowing the brand very well.500 brands in 24 countries developed brand equity hierarchy. Cultural Consumer Characteristics Tool & socio-demographics) From data on 8. Relevance: assessment of suitability by consumer III. buying intentions.